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Millennium Post

India’s destination next

Oh! The joy of numbers that an Afro-India story spews out! A combined population of 2.3 billion. An aggregate GDP of 3.5 trillion growing at an average rate of five per cent. A population where majority is below the age of 20 demanding goods and services. Need one say more?

Africa to India and vice versa. Here to stay and here to thrive. Trade exceeds $65 billion and projected to cross $100 billion in two years, a five fold increase in seven years. India needs oil, energy, minerals and coal while Africa has loads of them. Africa needs skills, affordable consumer goods and education which India can provide. Every 5th switch you turn on in your house is powered by African oil or coal.

A heady mixture of geo-political realities, cultural ties that go back to generations, a growing market for mass level goods, need for food security and abundant resources make the best arranged marriage in India thus far pale into insignificance at the specter of what is unfolding in the Indo-Africa corridor. Sixty per cent of the world’s arable land beckons as Indian companies queue up to get land and get into large scale commercial farming. They bring Indian capital and Indian labour to complement the know-how transfer (from Latin America). Close to three quarters of a billion are going into agriculture and horticulture spread across 4,00,000 hectares already. South to South it is as Indian farmers’ trudge along to Ethiopia, Kenya, Sierra Leone, Senegal, Tanzania, Mozambique, Zimbabwe in pursuit of land and food.

The ability to deliver affordable goods and services at an acceptable quality to the mass market was honed in the playing fields of India and now being perfected in the savannahs of Africa. Pharma companies from India, especially those specialising in chronic and infectious diseases, see the WHO commitment and the local government allocations in Africa to tender based healthcare spend as a Godsend; tired as they are with the singular lack of such policy level focus in their own home country. These companies are aggressive and eyeing the retail market which is close to $100 million and then government tender market reputed to be close to $300 million! The current global standards of manufacturing together with their cost efficiencies make them lethal in the competitive market.

Education is a minefield of opportunity and indeed a policy priority in a region where the demographic dividend can only realise its potential if skills are acquired and jobs are created. The Indian involvement here is interesting.  There are initiatives underway in Uganda to set up an Indian Institute of Foreign trade and in Ghana an Institute of Information Technology. Fifty thousand plus African students already study in India out of which close to 10,000 have full scholarships from India.

The battle for the hearts and minds is truly underway as future generation of African leaders will in some form owe an allegiance of sorts to the great Bharat? One pleasing aspect is of course that the ingenuity of India is being exported into Africa as there are projects galore which attempt to capture the opportunities through proven models out of India. A rural electrification project in Burkina Faso, a cassava plant in Cameroon and a cement plant in Djibouti bear testimony to the manifold talents of the enterprising Indian.

Not to be left behind is the undoubted prowess of the Indian medicare industry. Not merely satisfied with treating African patients when they arrive in India, some of the other groups have now actively started looking at working in the local markets with local health practitioners, build local capacity and encourage local investing; no doubt influenced less by good Samaritan intentions and more by the fact that funding is available in this sector in Africa today! E-based solutions around diagnostic and imaging procedures to support early detection and preventive health care is also gathering momentum.

A small known truth is that almost all Indian businesses, big or small, seem to have embraced Africa as their means of becoming global. Quietly for some and big bang for others –  but all looking for the proverbial bounce for the buck in the world’s last frontier of hope and growth. Finding new customers and new markets has always guided global companies. In case of India add the new dimension called the Indian bureaucracy. Almost all Indian businesses believe that one overriding factor influencing their Africa strategy is the need to grow without the constraints that every sector suffers domestically, which makes them worry about the increasing cost of doing business in India. The past migration trends and movement of indentured labourers from India to work in the plantations and the railroads means that there is a wealthy Indian diaspora waiting to embrace and engulf the Indian businesses venturing out.

The chaos and the complexity of Africa is tailor made for our DNA and this is where we score the most. The African continent is still fragmented, in relative disarray and not ripe for large pan African type pickings. But its ready for the patient, strategic, long term and a granular strategy that Indian businesses have a unique strength around. Thus one can see the manifold and broad-based involvement in Africa from India. But that is the topic for another day. Let us for the time being bask in the sunshine that the African sun provides. It’s a moot point where Africa is finally heading. Opportunistic strategies, slick salesmanship and scant regard for the sensitivities and needs of the local population means that the rising sun can be blocked out soon. Inclusive growth is still elusive, a vastly improved set of human indicators still do not hide the fact that they are well below global emerging marker averages, strife and tribal tensions dominate national politics, crime and disorder still rule supreme across the African savannah and skills remain absent.

A young population in today’s tech-age dreams high and aspires higher. Thus promises need to be kept and opportunities need to be made available for energy to be diverted correctly.

How will a vast continent, divided as it is with colonial borders and fragmented yet small markets prosper if intra-Africa trade does not flourish? For that we need both trade protocols and logistic solutions, both of which are largely absent. For Indian companies dreaming big in Africa and thinking beyond mere resources, engaging with local people and firms will be key. It was their superior local knowledge and dexterity. Propagate and replicate that, and Africa will not disappoint. The less than savory experiences of some of the Indian engagements in Africa in the recent past bear testimony to the old adage. Ignore the obvious and rue the lost opportunities. Accept the reality and the future beckons.  

The author is a fellow of the Indian Institute of Chartered Accountants and a member of the Investment Analysts Society of South Africa
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